There has been lots of buzz about the impact that beacon technology can and is having on the retail industry. And in case you somehow missed the hype about this technology, here is a high-level overview of how it works and how it is being used. Beacons are small, inexpensive devices that enable more-accurate location identification than GPS, cell tower triangulation and Wi-Fi proximity. Beacons do not store data, but transmit small amounts of data via Bluetooth low energy (BLE) and can be used for indoor or outdoor location technology needs.
A beacon broadcast has the ability to approximate when a smartphone user has entered, exited or lingered in an area. Depending on a smartphone user’s proximity to a beacon, the user is able to receive different levels of interaction at each of these three ranges. And with an estimated 570 million Android and Apple smartphones able to send data from beacons to your mobile app, you can see the opportunities for interaction with your guests.
According to a 2014 article in Business Insider, half of the top 100 U.S. retailers were testing beacons in 2014, with beacon technology expected to be found in 1/3 of their store locations by the end of 2015. BI Intelligence expects 85 percent of U.S. retail locations to be using beacons in 2016, with continued growth expected to reach 4.5 million active beacons by the end of 2018 and 3.5 million of these devices in use by retailers.
Retailers such as Walmart, Macy’s, Lord & Taylor and Target are using beacons to track customer movements and increase revenue by targeting buyers with offers while they are shopping. Target is pushing the envelope by sorting your shopping list as you move around the store to make shopping easier. Now, apply the “you may also like” upselling recommendations that Amazon perfected long ago and you could have the best of all worlds when it comes to creating an exceptional retail customer experience designed to increase loyalty – thereby increasing revenue. Target is also allowing customers to ask for assistance from their phones by relaying their locations to a store associate. Some of us may still remember when it was the norm, not the exception, for a store associate to actually walk up to you and ask if you need assistance. But now it would be when you actually want someone to help you!
In addition to retailers, Major League Baseball is using beacons in stadiums to increase sales and create a better customer experience by pushing discount offers, notifying fans of where the shortest lines are and pushing retail offers. Factor in a robust data warehouse that provides insights into customer preferences based on previous behavior and now I am able to send a personalized offer to each fan.
Great news for retailers and MLB right? So why aren’t we hearing about the opportunities in hospitality?
I recently listened to an interview with gaming technology visionary John Acres and, as usual, he nailed one of the big misses within this industry. He spoke about the focus of analytics on machine and table play and the big miss on knowing what else customers are doing while on property. We know when and where they redeem points, but we don’t know about their cash and credit card transactions. We haven’t always been interested in the total value of our customers.
Beacons can help change that. Imagine using the customer journey data that beacons gather so well – when and how much time patrons spend dining, shopping, or at the spa – as well as external data such as what social games they play, how often and how long. Now, you have the information to create a personal journey for each customer or at least for each customer grouping.
The customer journey of today might consist of a patron entering a brick-and-mortar casino, finding a favorite game to play, downloading a free play offer, redeeming points for lunch at a favorite restaurant and then leaving. So the interaction, at best, would have been with the cashier at lunch. I’m not saying that the interaction with the cashier is a bad thing, but what was special about that customer journey?
Now, let’s think about the customer journey that could be possible! Your customer arrives and has opted in to your mobile app. A beacon picks up the customer’s arrival, and a message is sent to your customer service team and your cocktail server staff with the guest’s location and the insight that the guest has a birthday this month. A cocktail server delivers the customer’s favorite drink “on the house” along with wishes for a happy birthday. Around lunch time the guest decides to grab a bite to eat. Upon leaving the restaurant the guest swipes his or her loyalty card and, of course, we have already captured everything we can about our loyal customers, including their cash and credit card transactions. Upon the swipe of the loyalty card, the cashier is alerted that this customer has a birthday this month, and the lunch is comped and happy birthday wishes are again voiced.
Your customer then goes back for a couple more spins on a favorite machine and receives a notification that 10 entries into next week’s drawing for a new car have been earned. The customer leaves the property, and the next day receives a push-notification reminder of offers that will expire soon and that the jackpot on the guest’s favorite progressive machine has reached an all-time high. Now that’s driving an incremental trip!
So, let’s identify some must haves and realistic opportunities with a beacon deployment.
- A robust data warehouse providing a holistic view of your customer, including personal and behavioral data while on and off property.
- A mobile app that has a perceived value to your customers.
- A plan on what and when to trigger an offer or notification to a customer.
- Take into consideration that age, gender and income make a big difference in a customer’s tolerance for this type of technology. Ensure that you don’t over communicate. Too many communications or communications of no interest will result in the customer opting out.
- Beacons do not offer data security; therefore, you must use your own or a SaaS platform to
secure, analyze and act on the data.
- Don’t look at this as technology that replaces your player development or customer service staff. It should enhance their ability to provide better customer service and, if done well, could be a real differentiator in a very competitive market.
- Don’t forget the benefits of the reduction in direct-mail costs: no need for an email address and less reliance on survey data and focus groups, which are often biased because participants can tell you what they think you want to hear in order to get more “free stuff.”
- Beacon technology can provide a better guest experience with just-in-time offers and notifications. This gives you the advantage of filling hotel rooms or an event at the 11th hour.
- Beacons can supply relevant customer information to your customer service staff to facilitate a great interaction.
- Continue to drive the data back to your data warehouse so you learn everything you can about your customer.
At the end of the day, market, analyze, adapt and repeat. Engage your best marketing minds to find ways to use this technology to learn more about your customers, increase customer satisfaction and decrease direct mail expenses. And let’s show those retailers how hospitality pushes the envelope!
Susan Kesel serves as Sr. Director of IT for Delaware North in Buffalo, NY. With the past 25 years spent in the gaming and hospitality industry, her experience includes information technology, marketing, player development, social gaming, route and casino gaming operations. Susan has helped to open new casinos on both land and river, and worked in both mainstream and tribal gaming. An innovative and open-minded technologist, she was instrumental in the development and implementation of Turning Stone Resort and Casino’s patented Account Based Wagering System. She served as CIO / Vice President of IT for Turning Stone Resort and Casino and Standing Stone Gaming, and CEO of Harvest Trends, Inc. Susan is an Alumni of the Board of Advisors for TribalNet and for Gaming and Leisure Magazine, and has written many articles for industry magazines and moderated or participated as a panelist across the gaming industry.